Shiksha Finance aims to fund more students to prevent drop-outs. (The Hindu)

Shiksha Finance, a Chennai – based school financing startup. It plans to open more branches in nearby towns and villages, to further reduce school dropout rates! “During 2015-16, we provided education loans to 600 students and financed 240 educational institutions for asset and infrastructure creation. This year, we have set aside Rs.3.5 crore for this activity against Rs.1 crore provided last year. Besides, we are strengthening our technology backbone to scale up student education loan model”, said V.L. Ramakrishnan, Director and CEO of Shiksha Finance. “Over the next few months, we have plans to cover entire Tamil Nadu by opening five more branches. Soon, we will be entering Karnataka and opening more branches in Andhra Pradesh. For the next 12-14 months, we will be focused on providing education loans to students and later expand it to other areas. Currently, we have 30 staffers and this will be doubled. We will be achieving break even by February 2017”, V.L. Ramakrishnan added. Read more on Education

Jacob Abraham, COO at Shiksha Finance said that they were building a new psychometric – based business model to assess the financial status of their no-income customers as they cannot furnish bank statements or Cibil score to avail loans. “Through the new method, we can easily find out, whether one has the ability or intent to pay back the education loan. Besides, the loans approval time will be cut from 24 hours to two hours”, Jacob Abraham said. Shiksha Finance was started in June, 2015 by V.L. Ramakrishnan and Jacob Abraham. Shiksha Finance provides educational loans, at low rate of interests (5%), to middle and lower – middle class families, who find it very difficult to fund their children’s education right from kindergarten to class 12. The educational loans are provided through unique social collateral that can be paid back through a manageable repayment schedule. The average ticket size of education loan was about Rs.15, 000 while loans to educational institutions ranged between Rs.10 lakh to Rs.1.5 crores. “After the infrastructure expansion, the student enrolments in these institutions have increased and drop-outs have also reduced”, Jacob Abraham said.

The services provided by the education – funding startup, Shiksha Finance are very noble indeed. Ever since Independence, Indian schools have been struggling with the issue of school dropouts. The people in towns and villages of India do not have enough money to fund their children’s education. Some people send their children to school upto class 10 and then make them go to work because they are unable to fund their children’s education thereafter. Some villagers and town folks do not send their child to school at all because they are so poor and cannot afford to educate their child! It is heartening to see an Indian startup solve this problem. It is doing what the Government of India did not do for seventy years after Independence! The Government of India should learn from this startup and atleast fund useful startups like these if it does not want to do the task itself. Hats off to V.L. Ramakrishnan and Jacob Abraham for their noble initiative. Read more on Startup News

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